AWRA Annual Meeting: 2011 Albuquerque, NM

Session: New Water Resources of NM and Obstacles to their Development

1:30 – 3:00 Monday, Nov 7

”Economic Costs of Sustaining Water Supplies: Findings From the Rio Grande Basin”

Frank A. WardNM State University

College of Agricultural, Consumer, and Environmental Sciences NM Water Resources Research Institute

Ongoing Challenges in RG Basin

• Adaptation to droughts, floods, climate change• Search for resilient water institutions where there are

complex watershed processes and constraints– Agronomic– Hydrologic– Meteorologic– Economic– Political

• Search for Just, Flexible, Open Water Policies• Understandable Science-informed policy

Road Map

• Describe Potential Benefits of Comprehensive Basin Analysis (CBA)

• Brief history of Rio Grande Compact

• Describe principles how CBA can inform sustainable water policies.

• Show how CBA can inform water sharing debates

• Illustrate the use of CBA for policy analysis: sustaining RG Basin’s aquifers/reservoirs

• Conclusions

Uses of Comprehensive Basin Scale Analysis (CBA)

• CBA can provide data to inform debates on:

– Adaptation to floods, drought, climate change

– Ways to share transboundary waters

– Irrigation water conservation subsidies

– New knowledge or method (e.g., evaporation, ET)

– Socially just, economically efficient, politically acceptable water infrastructure

– Effective development planning

– Cost effective Payment for Environmental Services

Simple Graphics to inform complex watershed policy debates:

Sankey Chart• Watersheds are scientifically complex• Policy debates add complexity• Few simple graphics can show the choices

Water Balance: Rio Grande

• Rio Grande from Colorado (USA) to US-Mexico border with supplies, gauged flows and depletions by location

• Impacts of wet, normal, dry inflows

• Must abide by existing water institutions– Rio Grande Compact

– US Endangered Species Act

– US Mexico Treaty of 1906

– New Mexico – Texas water sharing agreement (2008)

Limits of Graphics, Need for Models

• Economic and policy goals: sustainability, sustainable diversion reductions, resilient institutions, minimum econ losses from drought, flood, climate change

• So we use mathematical models of hydrology, agronomy, economics, and institutions for RG Basin

Water sharing arrangement hammered out for Rio Grande

• 9 years debate, experiment, negotiation (29-38)• Signed in 1938• Based on a creative combination of:– Observing historical use patterns– Mathematical formula for predicting historical use– Formula explained how historical use varied in wet

v. dry years.– Formula was applied to share water for the future

in wet and dry conditions.

Rio Grande Compact (Approximate) Water Sharing Formula

• CO agreed deliveries to NM (1000 af/yr)

• NM agreed deliveries to TX (1000 af/yr)

Lobatos Conejos DelNorte

Conejos DelNorte2 2

10 0.27* 0.11*

.00005* 0.0003*

>- + +

+ +

20.56* .00001*Elephant Butte Otowi Otowi>+ +

Role of CBA to Inform Water Policy Proposals

• Historical outcomes by state, use, location, and period under actual water policies– Inflows: headwater supplies

– Hydrologic: streamflows, reservoir levels

– Agricultural: Irrigated land, farm income, yields, prodn, food self sufficiency

– Urban: population, per capita use, price, supply reliability

– Environmental: key ecological assets

– Economic: Total economic benefits

Role of CBA to Inform Water Policy Proposals

• Historical outcomes by country, use, location, and period under potential water policy A– Inflows: headwater supplies

– Hydrologic: streamflows, reservoir levels

– Agricultural: Irrigated land, farm income, yields, prodn, food self sufficiency

– Urban: population, per capita use, price, supply reliability

– Environmental: key ecological assets

– Economic: Total economic benefits

Role of CBA to Inform Water Policy Proposals

• Future outcomes by country, use, location, and period under actual water policies– Inflows: headwater supplies

– Hydrologic: streamflows, reservoir levels

– Agricultural: Irrigated land, farm income, yields, prodn, food self sufficiency

– Urban: population, per capita use, price, supply reliability

– Environmental: key ecological assets

– Economic: Total economic benefits

Role of CBA to Inform Water Policy Proposals

• Future outcomes by country, use, location, and period under potential water policy A– Inflows: headwater supplies

– Hydrologic: streamflows, reservoir levels

– Agricultural: Irrigated land, farm income, yields, prodn, food self sufficiency

– Urban: population, per capita use, price, supply reliability

– Environmental: key ecological assets

– Economic: Total economic benefits

Use of a CBA

• Impacts of alternative policy, supplies, or population by country, use, location, period.– Inflow differences: historic v potential

– Hydrologic differences: historic v. potential

– Agricultural differences: historic v. potential

– Urban differences: historic v. potential

– Environmental differences: historic v. potential

– Economic differences: Benefits of new policy compared to historic policy. How these changes in benefits vary by alternative future supplies or future populations

without river inflows reservoir storage crop yields, prices farm income

sustainability crop water use (ET) cropland crop costs urban benefits

reservoir evap reservoir capacity crop production hydro benefits

gauged river flows cropland capacity crop mix NPV farm income

water diversions NPV urban benefits

river outflows NPV power benefitsNPV total benefits

with river inflows reservoir storage crop yields, prices farm income

sustainability crop water use (ET) cropland crop costs urban benefits

reservoir evap reservoir capacity crop production hydro benefits

gauged river flows cropland capacity crop mix NPV farm income

water diversions NPV urban benefits

river outflows NPV power benefitsNPV total benefits

Impact of Reqd Sustainability on Selected Outcomes, RG Basin

Policy Flows Conditions Effects Economic ValueBase Base Base Base Base

Modified Modified Modified Modified Modified

Example Structure of CBA: Rio Grande Basin: CO, NM,

TX

19

Objective

(1 ) (1 )ut ett t

u t e tu e

NBu NBeMax NPV

r r

[ ]uckt ct uckt uckt ucktNBA P Yield Cost L

(1 )uckt

tu c k t u

NBANPV Ag

r

( . , ), ( . ., )ut etNB e g urban NB e g wetlands

• Irrigable land, Headwater supplies• Sustain key ecological assets• Hydrologic balance• Reservoir starting levels (sw, gw)• Reservoir sustainability constraints (sw,

gw)• Institutional– Endangered Species Act

– Rio Grande Compact (CO-NM; NM-TX)

– US Mexico Treaty of 1906

– Rio Grande Project water sharing history (NM/TX)

20

Constraints

21

( , , ,...)

ut uck ucktc k

X B L

u irrigated region

c crop

k irrigationtech flood drip pivot

Ag water use

22

LobatosvtX Colorado runoff

SA Lobatosvt vtX X NM runoff

Institutions: e.g. Rio Grande Compact

Example Results: Rio Grande Basin

• Policy 1 -- Sustain natural water capital over a 20 year period: aquifers to starting levels, no requirement for reservoirs

• Policy 2 -- Increase natural water capital over a 20 year period: aquifers to starting levels, reservoirs to 90% of capacity

Table 1 : Change from Base Policy in Hydrologic, Agronomic, and Economic Outcomes: Sustaining and Renewing Natural Capital, Upper RG, 2010-29

UnitsTotal, Three Basin States

From Sustaining Natural Capital

From Renewing Natural Capital

Hydrologic Outcome1000 ac-ft/yr -198.1 -16% -218.7 -19%

Water Consumed (ET)

Agronomic Outcome1000 ac -87.3 -27% -94.8 -31%

Cropland in Prodn

Economic Outcome

$US 1000/yr

Total Net Benefits -34,384 -6% -62,048 -11%

From Water Use -33,710 -6% -64,868 -12%

From Water Environment -674 -4% 2,820 14%

Conclusions: Overcoming Obstacles to Sustaining NM’s Water Supplies

• Information Needs– Economic value of water• Agriculture• Urban• Environment

– Cost of Water Conservation• Irrigated agriculture – subsidies• Urban Use -- subsidies• Water pricing: farms, cities, environment

Conclusions: Overcoming Obstacles to Sustaining NM’s Water Supplies

• Needs for Policies/Institutions– Complete NM’s Stream Adjudications, Especially

Middle and Lower Rio Grande– Build and use resilient institutions for adapting to

drought, climate change